The Indian rupee was trading slightly higher against the US dollar compared to its previous day's close, a day ahead of the Reserve Bank of India's bi-monthly monetary policy meeting. The rupee was trading at 70.49/dollar at 9:30 am. It opened higher at 70.51 a dollar as against Monday's close of 70.46. The 10-year government bond yield was at 7.60%. It previously closed at 7.62%.

After a 5 percent rise in international crude prices, the rupee marked its biggest fall since 13 August of 1.3 percent against the dollar to end at 77.46 on Monday. Besides a rise in crude prices, the GDP (gross domestic product) and fiscal deficit data released on Friday, last week, disappointed the market. The country's GDP growth slowed down to 7.1 percent for the July-September quarter from 8.2 percent in the previous quarter.

The traders are now cautious ahead of the decisions from RBI's monetary policy meeting scheduled for Wednesday. Analysts are focused on the communication and stance from the central bank rather than the outcome of the key rate.

Asian currencies were trading higher on Tuesday morning from continued weakness in the US dollar. Meanwhile, BSE's Sensex opened lower by 54 points to 36,186 and NSE's Nifty 50 fell 0.14 percent or 15 points to 10,870.